DBS Group (SGX: D05) has been riding the wave of interest rate increases to post strong results. The lender saw its 2023 first half (1H 2023) net profit surge to a new record high of S$5.2 billion as its net interest margin (NIM) came in at 2.14%. Back then, CEO Piyush Gupta anticipated that there would be an upside bias to NIM with possible further increases in interest rates by the US Federal Reserve. He also expected specific provisions to remain at the low end of around 0.1% to 0.15% of the bank’s loan book. However, of late, China’s property sector has come under stress. Will China’s troubles put a spanner in DBS’s growth plans?

Chinese developers under pressure

Chinese developers’ woes have made the headlines in recent months. China Evergrande Group (HKSE: 3333), one of the world’s most heavily indebted property developers, filed for bankruptcy in a US court a month ago....